CMBS Lender Needs Large Low Leverage

Many of our clients are taking advantage of GSP's correspondent relationship with ARCS Commercial Mortgage. ARCS is the #1 originator of Fannie Mae DUS product in the nation. So far ARCS has financed over $1.4 billion of Fannie Mae loans in 2001! Remember, it doesn't cost any more to process through GSP than going direct to ARCS. Here are 4 recent fundings for GSP clients, and we have approximately $75 million "in the pipeline":

$5,287,000 Refinance in Bellevue, WA.: This is the definition of a continuing client relationship. 32 ½ years, but who is counting? My first client was Tom Yedor and my first loan was 122 units in Santa Ana in 1968 for $1.5MM, a "full boat" loan. This loan done under our correspondent relationship with ARCS was placed for Tom's son was for a 92-unit apartment project built in 1980. Terms: (1) Loan Amount: $5,287,000 (2) Rate: 6.94% (3) Tier 2+ (4) LTV: 69%; (5) DCR: 1.30 (6) Term/Amort: 10/30; (7) Cash out to the borrower. (George Smith)

$1,850,000 Refinance in Long Beach Area (FNMA Streamlined "5-50" Program) This 30-Unit, 3 building, 100% leased complex was built in the late 1950's. Amenities include a swimming pool and underground parking. Our borrower recently repositioned the property. ARCS underwrote using the new rents and cash flow even with limited history. FNMA 5-50: For properties with 5-50 units, program features limited scope 3rd parties (appraisal is less than 10 pages!), no environmental, streamlined loan docs. Terms: (1) Loan Amount: $1,850,000; (2) Rate: 7.13%; (3) Tier 2+; (4) LTV: 80%; (5) DCR: 1.25; (6) Term/Amort: 10/30 (Gary E. Mozer, Gerald Price)

$2,200,000 Acquisition/Reposition (82% of total project costs) for Palm Springs Area 42 Unit Complex This was another "5-50" transaction. This property features lush landscaping, pool, sauna, etc. Now 95% occupied, our client is undergoing a cosmetic rehab before leasing up (there is a 40+ waiting list). ARCS aggressively underwrote to over 80% of total cost, using Fannie guidelines allowing for some rehab costs. Terms: (1) Loan Amount: $2,200,000: (2) Rate: 6.89%; (3) Tier: 2+; (4) LTV: 82%; (5) DCR: 1.25; (6) Term/Amort: 10/30 (Gary E. Mozer, Gerald Price)

$3,000,000 Acquisition Financing (6.78%, fixed) for 64-Unit Mid-Wilshire Complex Our borrowers, seasoned apartment turnaround specialists, plan to take advantage of Fannie Mae's "evergreen program." How does it work? They acquire the property (100% leased, many rents below market) at 79% of purchase price and lock in an extremely attractive fixed rate for 10 years. Then, after some minor rehab and increasing cash flow, Fannie will re-appraise/re-underwrite the property. Fannie will then make a fixed rate second mortgage. Borrower pays the prevailing rate only on the incremental increase (Fannie will subsequently fund a third mortgage, fourth mortgage, etc.). Terms: (1) Loan Amount: $3,000,000; (2) Rate: 6.89%; (3) Tier 2+; (4) LTV: 79%; (5) DCR: 1.25; (6) Term/Amort: 10/30 (Steve Bram, John Lopez, David R. Pascale, Jr.)

George Smith will be a panel participant at the National Apartment Association 2001 Education Conference & Exposition on June 14-16 in Las Vegas. The Panel - Multifamily Housing Industry Trends will be chaired by Martin Stolzoff, Real Estate Conference Group and will include Andrew Blount, REALHOUND.com; Harvey Green, Marcus & Millichap; Keith Guericke, Essex Property Trust; George Smith, George Smith Partners; and Jack Kyser, Los Angeles Economic Development Corporation.

CMBS Lender Needs Large Low Leverage Institutional Quality Loan: Sub-7% Money: Pricing as low as 155-170 over 10 year T's. One time opportunity. Reason: Have a pool going to market in 60 days. Need a "cover sheet" loan to set theme for offering. Size: $50,000,000 to $100,000,000 Terms: LTV below 60%; Debt Coverage Ratio: 1.70+; Quality: Has to be extremely high quality asset with no "warts"; Sponsorship: Experienced and prefer a household name; Lender Fee: par.

Hot off the presses. Major CMBS originator just lowered their matrix today. Tightening spreads by 10-15 bps across the board. Multifamily: T + 160-210, Anchored Retail: T + 210-230, Low leverage office: (1.35+ DCR): 190-215; also: now quoting on Hotels: 65% LTV, 1.45 DCR: T + 275 (full service hotel)